Bridging the Distribution Gap
Essmart, co-founded in Tamil Nadu by American Fulbright-Nehru researcher Diana Jue-Rajasingh, delivers life-improving technologies by developing distribution channels within existing local networks.
It’s said a journey begins with a single step but, sometimes, the last mile proves to be the most challenging. Jackie Stenson and Diana Jue-Rajasingh found this to be true as they traveled through sub-Saharan Africa and southern India while they were graduate students at the University of Cambridge and Massachusetts Institute of Technology, respectively. Tracing the journey of life-improving technologies like solar lamps, water filters and efficient cookstoves to those in remote locations, Stenson and Jue-Rajasingh discovered that villagers, for whom the products were intended, had no access to or even knowledge of these products. This was mainly because the distribution channels were broken.
In 2012, Stenson and Jue-Rajasingh confronted this “last mile problem of the developing world” by co-founding the distribution company, Essmart, in southern India. Jue-Rajasingh was then selected for a Fulbright-Nehru Research Fellowship in Bengaluru, after which she spent three years as Essmart’s chief operating officer and building up the local team, along with Prashanth Venkataramana and Poonacha Kalengada. Essmart is registered as a corporation in the United States and a private limited company in India.
“We couldn’t find any organization purely dedicated to last-mile distribution, which leveraged the local infrastructure,” says Stenson, Essmart’s chief executive officer. “Existing distributors, for instance, either imported cheap electronic lighting products, which developed unrepairable problems within weeks, or charged exorbitant premiums from rural shopkeepers due to transport costs, with no after-sales service.”
Essmart started in Pollachi in Tamil Nadu, utilizing existing “kirana” retail shops, which majority of rural households rely upon for their consumer needs. “Essmart chose to work with small mom-and-pop-style stores as they are the best entrepreneurs in a rural setting,” says Venkataramana, Essmart’s India operations director. “They not only help us disseminate information about our products, but also help the customers get products repaired or replaced.”
Essmart sources over 200 socially impactful products from manufacturers. Before adding new items like agricultural sprayers or cookware appliances to their catalog, the company ensures these are thoroughly tested. But, perhaps, the most important benefit to local shop owners is Essmart’s assurance of warrantied products, with after-sales support and product replacement services.
According to Kalengada, Essmart’s director of field operations, the company invests a lot of time supporting the kirana shops in their distribution network. “Each shop owner is given a demo and technical training by an Essmart sales executive before he stocks the products. This ensures the owner and his customers know the benefits of products that were largely unknown to them previously.” He shares the success story of how the use of solar lamps has helped local businesses stay open after dark, without losing out on sales due to lack of access to electricity.
“Partnerships with kirana stores as last-mile agents are a win-win,” says Shanina Mercedia van Gent, Essmart’s project manager. “While there are many companies developing products to meet essential needs, there are few entities working in the space between tech developers and end-users. Technologies and products like solar lights and clean cookstoves only have life-improving potential if they are properly delivered, adopted and serviced over time.”
“Over the past seven years,” says Venkataramana, “Essmart has managed to reach over 80,000 customers through a network of over 1,400 local retail shops, with 14 distribution centers across Tamil Nadu and Karnataka. Each center covers a radius of 60 kilometers from rural to remote villages. And 20 distribution centers are planned for 2020.”
Stenson says that an important part of Essmart’s mission is to ensure that life-improving technologies are not designed in vain. “We are building a foundational, last-mile distribution network that can move innovative, durable, socially impactful products out to the communities that they were intended to help. At the same time, we are moving key data up the supply chain to close the gap between designers and end-users.”
Jue-Rajasingh is currently focusing her research on the developing world as a Ph.D. candidate in strategy and sociology at the University of Michigan. “My day-to-day work at Essmart as well as my experience as a Fulbright-Nehru researcher,” she says, “exposed me to some of the most intractable problems facing underserved communities in emerging economies.” As an academic, she hopes to ask questions like, “How can the international development community ensure that the markets are being developed by entrepreneurs in an equitable, just way?” and “How can businesses most effectively work in underserved communities, in ways that address their customers’ needs and also sustain profits?”
Hillary Hoppock is a freelance writer, former newspaper publisher and reporter based in Orinda, California.